Posted by Tim Perr
I thought it might be fun to take a brief break from talking about harvest decisions and discuss a bit of business. As referenced in my prior blogs, my partners and I have decided to introduce a second label with the 2008 vintage.
The business plan for our second label is to produce a series of food-friendly table wines made from fruit sourced from (local) Central Coast vineyards and priced at about $15 per bottle. Our second-label wine is hand-crafted and made with the same care and passion as the Pali-brand wines but uses somewhat less expensive ingredients to keep the costs in line with the bottle price. For example, while all oak barrels in our winery are from premium French coopers, the second-label wines will not see much, if any, new oak. Obviously, the fruit going into this second label will also cost a bit less than the Pali fruit.
For 2008, for our second label, we are making a Grenache-based rosé, a Petite Sirah/Zinfandel blend, a Cabernet Franc/Merlot blend, a Grenache/Mourvèdre blend and a Barbera. In addition, we are hoping for a last-minute opportunity to pick up some interesting white wine fruit like Rousanne, Marsanne, Viognier, Gewürztraminer or something like that. (Anyone out there have any for sale?)
The purposes for the second label are multifold:
1. Economic diversification: With Pali’s wines running between $40 and $60 per bottle retail, we are vulnerable to a downturn in the economy (like we are currently seeing). Our second-label wines will give us a place in the value market segment, which should see strong growth in a strapped economy—after all, it’s not like people are going to give up drinking wine just because we are in a recession.
2. Tasting room sales: A growing percentage of our sales comes from tasting room visits. These customers seek out a diversity of wines as part of their tasting experience. We think it will be attractive to be able to offer a menu of different wines and price points to pour and sell in our tasting room.
3. Declassification of Pali fruit: Each year, there are always certain lots of Pali fruit that are not quite as good as we would ideally like. In the past, our options were limited: either blend it in with better lots at the expense of bringing down overall quality; or sell it off as bulk wine at a huge economic loss. Now, we have one more option: if the fruit is good but not great, we can bottle it under our second label. What might not have been a good value at $40 per bottle might be a great value at $15 per bottle.
4. It's fun: Of all the fruit that has come into the winery this year, by far the second-label fruit (the Zinfandel and Barbera so far) has generated the most interest by the winery staff and my partners. Having a chance to taste and learn the different varietals is exciting and helps makes the winery a fun place to work.
The only question now is what to name the new brand. Any ideas?
Bruce Commiskey — October 1, 2008 9:07pm ET
John Wilen — Texas — October 1, 2008 10:46pm ET
Bill Robinson — Calgary — October 2, 2008 10:15am ET
Cheryl Durzy — San Martin, CA — October 2, 2008 1:17pm ET
Timothy Perr — October 2, 2008 5:15pm ET
Don Young — Calgary, Alberta — October 6, 2008 3:48pm ET
Ken Koonce — Dallas, Texas — October 7, 2008 1:49pm ET
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